Inherited from a mother with Dementia

[Bakerteer]

Hi My name is James. 

 

Bit of a back story; My dad bought a 2 bed flat near where I grew up in `97 after reading rich dad poor dad. He was terrified of making a loss and its turned into a gold mine. When he died in `04 my mum used the money from his life insurance to buy more property and now has a small portfolio. Two flats in South East London near where we live, a flat in Preston and a student pod in Loughborough. She built this up as her pension. It has had fantastic capital growth and great cash flow with a very low loan to book value. 

 

A little over a year ago my mum was diagnosed with dementia. She's still early stages but I it seems that she had not been managing will with her property's and finances in general for some time. She had always been quite secretive about her finances. But after a frank discussion she agreed to let my sister and I look after her finances for her to ensure  that she is looked after. 

 

The properties need tending to and her taxes and accounts were a mess. It took me forever to search the whole house and find all the bits of paper and still don't have it any any real kind of order but i am working on it. We took financial advice from a tax adviser and decided to transfer the ownership into an LLP with my mum my sister and myself as members. This has the benefit of helping with inheritance tax but also means that my sister an I can manage the portfolio without having to use LPA all the time (which i have found to be frustrating and limiting.)  a mum can still have all of the income. 

 

The process of transferring the properties into the LLP has taken a lot longer than i expected with lots of details I didn't know to expect. We need to refinance to cover the existing lending on the portfolio, i had to get a business bank account which Barclays made a nightmare [i might write a post about this] found out that the property bought in `97 had a short lease and needed extending. We want to draw capital out of the properties at the point of refinancing with the aim of having cash to be able invest further. Turns out lenders want to know exactly what we want to spend the money on. Ive felt like there has been a lot of hoops to jump through and i have been put through the ringer. much of it is a result of inexperience.

 

And during this time i have changed jobs and got married. so have had a lot on my plate. 

 

I started listening to the property pod cast and found Rob and Rob kept saying "we talked about that in episode..." and so i thought i would start from the beginning and am just getting to the point where they are introducing the property hub and i heeded their advice to get on here and chat. 

 

My aim ultimately is to grow the portfolio and the cash flow so that if and when my mum needs more intensive care we can afford the best available. She currently lives a good life, has a great social life, plays tennis several times as week and goes on at least two cruises a year with her partner. but unfortunately she has a degenerative disease an i want to be prepared for the worst and provide the best.  My first priority is my mum but I'm hoping that there might be some surplus for my sister, my wife an I to enjoy. I love the idea of the dream line and want to sit down with everyone and work out how to forfill everyone's dreams. I've yet to do this and want to work out how. 

 

In the short term i need to shaw up what we currently have. some of the properties are quite tired and need work to bring them up to a high standard, and things like extending leases. fighting with management companies ensure all service charges are paid and upto date, working out what has been spent in the past few years and see if i can get mum a rebate as im sure she overpaid. While the cash flow is good i feel that everything that comes in goes out on some unexpected debt or charge or tax bill. I like rob and rob's mentality of outsourcing and want to get a good team of solicitors and accountants in place. I feel like I've picked up a ball of sting with lots knots and ends sticking out everywhere and i need to weave it into a beautiful quilt. generally turning chaos into order. To this end i am really interested in finding processes that make everything run smoothly. 

The flat bought in `97 needs a complete refurb. Like I said my dad was scared of loosing money and spent the bare minimum at the time to bring it up to a rentable standard and has had no money spent on it since. now needs a new bathroom, kitchen, rewire, floors boards, carpets, boiler and more. Currently my wife and i rent it off my mum as nobody else would. 

 

slightly longer term i want to expand the portfolio and like i said the cash flow. I have followed the markets for years tried to invest myself and have several thousand saved up in sliver. i feel the property market might be in for a bit of a slow down with increasing interest rates and a slowing turnover environment i feel there could be a killing to be made with foreclosures and probate and distressed sellers in the next 18 months. I want to be in a position to pounce. 

 

While my mum mainly went for two bed flats im open to many options, considering shop's with flats above, airb'n'b property , im also interested in agricultural land. but as with everything i know little and want to learn. 

 

I look forward to learning lots in this forum and joining the community. I've already signed up for the meeting in Waterloo on the 6th September (august was fully booked)

 

if there are any posts or threads that people can point me to relating to inheriting a disorganised portfolio or from someone with dementia. how to plan for dementia care. or regarding the process of transferring into an LLP. also i will soon be undertaking the large refurbish (i have to) and any threads relating to the process to get everything done as quickly as possible will be great.

 

 speak soon

 

 

[connect_aiginvestment_co_uk]

If you haven't got a good broker I would also get one who will be able to advise you what to do relating to finance - Simon Allen from Searchlight finance is often mentioned on these forums and I have used him myself to set up 6 BTL mortgages and he is absolutely fantastic.

 

I would also start reading books relating to property - anything by Rob Dix, Angela Bryant or Richard Brown (who posted above) is good, with no BS. Be wary of some 'gurus' and their offerings.  Richard also has a great podcast (the property voice) and I would recommend Property Geek by Rob Dix as well.

 

I am a relatively new investor, my personal focus is houses for single lets as I want minimal effort.  I see tough times ahead for more 'exciting' strategies such as HMOs on a number of fronts and see lots of them for sale on Facebook groups.  Personally when I first started I set myself a goal of 18 months self-learning before I started to invest and when I was ready I got a great broker then started to research my areas. Never take anyones word for anything, always check yourself by speaking to others, especially if you're offered a 'great' opportunity.  I personally found a good letting agent first then used their help to identify the specific roads within my target area to look at.  I am in London investing in the NW.

 

Best of luck in the future James, from the sounds of it you're in a great position with a small portfolio already. Take your time and don't rush into making a decision, as surfers say "there is always another wave".